American Greetings

As part of an industry with generous profit margins and high barriers to entry, American Greetings had
spent decades in a comfortable position. Beginning at the turn of the 20 thcentury, it had helped to
create a mass market for the greeting card and had presided over its growth into a multi-billion-dollar
industry. Because the manufacturing of cards—especially those with special designs or attachments—
could be complex, and because customers were used to choosing from a large selection of cards, it
was difficult for new players to offer the big, established card companies any serious competition.

By the end of the 20 th century, American Greetings was the second-largest greeting card company in
the world, after Hallmark, and had bought out several of its lesser competitors. It had expanded its
expertise to become a major manufacturer of gift wrap, party goods, stationery, calendars, and other
“social expression” products. And it had also been successful as the creator of licensed characters such
as Holly Hobbie, Strawberry Shortcake, and Care Bears. But the core of its business remained the
profitable greeting card. As senior vice president and executive supply chain officer Michael Goulder
put it, “The average card has 25 to 40 cents of variable cost in it, we wholesale it for a buck or so, and
the retailer sells it for $3.00. What a wonderful industry!”

However, by the late 1990s, the business had become more challenging. Growth in greeting card sales
stagnated, and existing customers began to turn to online cards. At the same time, the company
began to experience pressure from retailers who wanted an increasingly larger share of the healthy
margins. Greeting cards were still a wonderful industry, but there were worries about the future.

As executives began to look for cost-cutting strategies, it was clear that the manufacturing process
needed to be re-examined. In Goulder’s words, “because of the way the industry worked for a long
time, we were late in focusing on the efficiency of operations.” But the question turned out to be
complex, because American Greetings had incomplete data on its manufacturing costs and no data on
outsourcing alternatives. Before it could decide on a plan for reducing costs, it had to more precisely
measure the company’s current costs for machinery, production, labor, and transportation.

Then the company had to decide on the most effective way to economize. Two main options rose to
the top: improvements in process and technology, and outsourcing to China. A number of executives
assumed that the answer lay in moving production overseas, but others argued that more savings
could be obtained by improving existing facilities and upgrading legacy equipment. In March 2005,
partisans of outsourcing and partisans of upgrading were both making their cases, as the company
looked to determine the future of manufacturing.

 
FieldFresh Foods

On one of those pleasant cold February mornings, Sanjay Nandrajog, the Chief Executive Officer
of FieldFresh Foods Private Limited, pondered the future. He had just returned to Delhi from the
company’s Agri Centre of Excellence (ACE), an R&D farm where he celebrated the dispatch of 500
metric tons of fresh baby corn to Europe. The top management team at FieldFresh was justifiably
proud of this achievement as it had required tremendous effort to become an important exporter of
Indian produce.

FieldFresh had been incorporated in 2004 with the vision of linking Indian fields to the world. India
had a number of natural advantages in terms of climate, acres in production, and labor force to
become a major power in agriculture. However, a poor infrastructure and an antiquated regulatory
regime had stymied efforts to unleash India’s promise. FieldFresh hoped to overcome those challenges
to bring India to the forefront of the world’s agriculture.

During its initial years of operation, FieldFresh had found out how difficult it was to build a supply
chain for produce in India. The company had been through a phase of experimentation where it tried
different sourcing models, logistical options, and crops. After less than stellar results, the company
had decided to concentrate on one crop, baby corn. Over the next 24 months, the FieldFresh team
adapted logistics to overcome crowded and crumbling roads, irregular power supply, and bureaucratic
procedures. The company worked with thousands of farmers to gain their trust. By 2010, the
FieldFresh team had been able to create an efficient supply chain for baby corn across Punjab and
Maharashtra at all levels— input delivery, credit, irrigation, timely scientific advice, production as per
specifications of European market, careful harvesting, improved produce handling, clean and fast
transportation, proper management of cold chain storage environment, gaining safety certification, as
well as grading, packaging, and labeling to meet international standards.

But success brought with it the expectation of growth. Nandrajog had a number of questions to
answer before he could articulate a plan. Should FieldFresh grow opportunistically into different
foreign markets as retailers and wholesalers demanded different products for their respective
markets? Should FieldFresh continue to focus on baby corn, whose supply chain-market linkages it
had perfected, or should the company expand the range of products it would supply? Should
FieldFresh continue to maintain its primary export focus, or shift relative emphasis to the growing
domestic market? 

Suzlon
Suzlon, an India-based wind energy company, had made quite a splash in its first three-and-a-half
years on the international stage. By the end of 2007, the company was the market leader in Asia and
had completed projects in fourteen countries across five continents. But many investors believed these
first years were just a warm-up for what was to come (the company’s market capitalization had
doubled since its IPO in 2005). Global demand for wind energy remained strong and Suzlon had added
significant capacity.

Indian textile manufacturer Tulsi Tanti founded Suzlon in 1995 to avoid having to rely on India’s
notoriously unpredictable and expensive electric power grid to power his family’s textile operations.
After commissioning two wind turbines, Tanti discovered that wind energy was an even better
business than textiles. Within six years of its incorporation, Suzlon had become the dominant player in
the Indian wind industry.

In June 2004, Tanti hired a Dane, Per Hornung Pedersen, to lead Suzlon’s entrance into the global
wind market. It had been an opportune time to enter the international wind energy business. The
demand for electricity was booming, while environmental concerns over greenhouse gases emitted by
coal-fired electrical plants had mounted and the price of fossil fuels had skyrocketed. With little more
than a cell phone and the internet, Pedersen set to work building Suzlon’s international presence.

While Suzlon pursued wind farm projects in markets Pedersen had targeted, the company also made
significant acquisitions. In 2006, Suzlon bought Hansen Transmissions, a Belgian manufacturer of wind
turbine gearboxes, and thereby became the world’s most vertically integrated wind turbine
manufacturer as well as a supplier to some of its competitors.

In 2007, Suzlon purchased REPower, a German manufacturer of large wind turbines, for $1.8 billion.
REPower built some of the world’s largest wind turbines, including a 6 megawatt model under
development. REPower’s large turbines augmented Suzlon’s product line and would allow Suzlon to
enter the off-shore wind farm market that appeared ready to take-off.

At the beginning of 2008, Suzlon was set to double its manufacturing capacity by year’s end. The
company was the fifth largest wind turbine manufacturer in the world, but had designs on moving into
the top three. Pedersen, therefore, was faced with the challenge of finding additional markets to fuel
the company’s continued growth.

Hearst Magazines International 2015

George Green had headed an effort to expand Hearst's publishing empire beyond U.S. borders.
Starting in 1989 with a slim list of international titles, he and his team had extended Hearst Magazines
International (HMI) around the globe. By 2015, Hearst International Magazines had 304 editions in 81
countries, with an extensive investment to develop related websites, apps, and events. As a privately
held company, Hearst did not reveal its financials, but President and CEO Steven Swartz in his annual
review to employees described 2014 as continuing Hearst's "record revenue and profit for the fourth
straight year. Our major businesses all posted profit gains for calendar year 2014."

In spite of its ongoing success, Hearst International Magazines faced challenges in 2015. Two issues
were particularly pressing –new laws in Russia that limited foreign ownership and the continued rise of
online channels.

Russian laws limiting foreign ownership of media had been signed by Russia's President Putin in
October 2014. The legislation limited foreign ownership of media to 20%. Unlike earlier restrictions on
foreign ownership, which had focused on radio and television, the new law also applied to print
publications, even to glossy magazines like Cosmo. The implications of the law and the implications of
the term foreign "control" were not yet clear, but Cosmopolitan and other HMI Russian publications
had to complete transactions by January 2016. What were the best approaches to doing business
under the new regulations?

The second issue facing HMI cut across all of Hearst's publications – how best to function in a world
where readers and advertisers were shifting to internet sources, particularly how to engage readers
and create revenue streams through social media. Many social media sites, from Facebook to Twitter,
to Snapchat, to Instagram, to Pinterest, to new sites that had not yet emerged, target audiences that
were also HMI's readers and buyers of HMI's advertised products. Social media advertising was also
changing rapidly, and advertisers and publishers were scrambling to find their place in the rapidly
evolving landscape. Was online material a supplement or a substitute for printed media? How much
overlap in content should there be between print and online and between different social media sites?
How do publishers and advertisers use the new metrics available from online sources?

WORKPLACE DRUG ABUSE

Managers hope they'll never have to deal with employee drug abuse, but the fact is that it does
happen. In this case, Amber, an administrative assistant started out well, but began to adopt strange
and inconsistent behavior. Her work was maintained pretty well, but she began arriving late and
calling in sick often, especially right around the time she got paid. She began borrowing and failing to
repay money, and then started showing a short temper on the phone with customers. After being
found in the ladies room sniffing white powder, she was confronted about a cocaine problem, and
reacted by quitting immediately, leaving a hole in the organization for months before a replacement
could be found and replaced. Experts believe the employer's actions were wrong, waiting too long to
confront Amber, and focusing on accusations instead of criticizing behavior directly related to work,
such as lateness and rudeness to clients. They also point out that Amber should have been sent in for
a drug test before being outright accused of using cocaine, opening up the opportunity for
rehabilitation instead of a severed tie.

MALDEN MILLS

Sometimes, doing the right thing is more important than profits, a lesson that Malden Mills learned
firsthand. When the factory burned down in 1995 just two weeks before Christmas, production halted
and employees assumed they'd be out of work until the factory was rebuilt. But CEO Aaron Feuerstein
extended the employees 90 days at full pay, as well as 180 days with benefits at a cost of $25 million
to Malden Mills. After the factory was rebuilt and all of the displaced workers were rehired, cooperation
and productivity reached a new high, with 40% more business, 95% customer and employee
retention, and a production increase from 130,000 to 200,000 yards per week. However, since then,
Malden Mills has been to bankruptcy court three times, with much of the debt tied to the rebuild of the
factory. Feuerstein made employees happy, to be sure, but business students should study this case
to consider whether bold philanthropic actions will pay off in the end.

A STARBUCKS ON EVERY CORNER

In 2008, Starbucks announced that they would be closing 600 US stores. Up to that point, Starbucks
stores had added new offerings, including wi-fi and music for sale, but started to lose its warm
"neighborhood store" feeling in favor of a chain store persona. Harvard Business Review points out
that in this situation, "Starbucks is a mass brand attempting to command a premium price for an
experience that is no longer special." Meaning, in order to keep up, Starbucks would either have to cut
prices, or cut down on stores to restore its brand exclusivity. HBR's case study shares three problems
with the growth of Starbucks: alienating early adopters, too broad of an appeal, and superficial growth
through new stores and products. Harvard recommends that Starbucks should have stayed private,
growing at a controlled pace to maintain its status as a premium brand.

SMALL CUSTOMERS, BIG PROFITS

Big business is attractive, with huge profits for some. But there's something to be said about small
business as well, with lower risk and the potential for creativity. Darren Robbins of Big D Custom
Screen Printing in Austin, TX found success in his business by pursuing customers with orders both
large and small. Although Big D started out catering only to large orders, the shop sat idle in between
orders, and through effective scheduling and transparent pricing, was able to fill in dead times with
smaller orders. Big D found a profit in a market segment that other local screen printers weren't
clamoring to fill. Experts believe this was a smart strategy, allowing Big D to spread out risk in their
business and offer customized products. But at least one person is critical of the offering, pointing out
that the niche has little upside potential, and may hurt the company's efficiency.

SUCCESSION PLANNING

Family businesses typically have the luxury of passing the torch down to children after parents retire,
but in some cases, there are no candidates, or the candidates may not be right for the role. This
presents a challenge when it's time to find a successor, especially if existing employees have assumed
that top level promotions would come from within the family. So the Carlson companies had to put in
great effort to find a replacement, looking both internally and outside of the company, ultimately
finding an internal candidate who would work well with the family but also offered plenty of experience
as an executive in different industries. According to Beverly Behan of Hay's Group, Carlson should be
commended for not only making the right decision in not hiring the heir apparent, but for handling the
job search in a calm, effective way.

RETIRING EMPLOYEES, LOST KNOWLEDGE

Another important retirement issue is one of lost knowledge. What happens when retirees leave the
office, taking years of experience and know-how right along with them? Businesses lose all of that
knowledge, but according to American Express, it doesn't have to be that way. Through a pilot
program, AMEX created a workforce transformation group that would allow retiring participants to
gradually give up some of their day to day responsibilities. In return, the employees would spend
some of this time mentoring and teaching classes to successors. This resulted in a phased retirement,
allowing employees to leave gradually and enjoy more time while still enjoying a portion of their
previous salary, and regular benefits. This also meant that some employees stayed a year or more
past traditional retirement age. AMEX believes this program is a success, allowing senior employees to
enjoy their last years of work in a reduced capacity, as well as educating the existing workforce for
future success. Consultant David DeLong agrees, citing this program as an example of how job
handoffs should really work.

STRATEGIC AD SPENDING
Advertising costs money, which many businesses find themselves short of these days. But forgoing ad
spending in favor of better profits can be a mistake. Experts say that in a slump, one of the best
things you can do is adopt or increase your advertising strategy to attract customers. During a
recession, this is especially true, as other businesses may be cutting back on their ad spending,
making your voice even more prominent to customers. After seven years of growth, buliding from 30
to 300 locations, Firehouse Subs' growth fizzled, and company leaders realized they had to do
something about it. So they returned local advertising fees collected from franchisees, not to put in
their pockets, but to take hold of their own local marketing. Sales fell even more, revealing that this
was not a good strategy at the time. Instead, Firehouse reclaimed their local marketing fee, and then
gave franchisees the option to take part in a new marketing campaign, requiring them to pay double
for local marketing, but in return, becoming part of an $8 million advertising campaign poised for
success. Experts commend Firehouse for having the courage to ask franchisees for more money where
it was needed, even when times were tough.

TYLENOL'S 1982 SCANDAL

In 1982, seven people in Chicago died after taking Tylenol due to an unknown suspect lacing the
capsules with cyanide after the products reached the shelves. In the immediate aftermath, Tylenol's
commanding 37% market share dropped to just 7% nationwide, despite the problem being contained
to the Chicago area. Tylenol was not responsible for the tampering of the product, but to maintain the
product's reputation, Johnson & Johnson pulled all of the Tylenol from the shelves, absorbing a loss of
more than $100 million dollars. Tylenol was successfully reintroduced with tamper resistant
packaging, discounts, and sales presentations to the medical community. The brand survived due to
swift action and effective public relations from Johnson & Johnson.

DAVID VS. GOLIATH

It's tough to be the little guy, especially when one of the big guys becomes your direct competition.
But at Hangers Cleaners, an offbeat image and good customer service helped them pull through when
P&G opened an eco-friendly dry cleaners in the same town. Hangers differentiated itself through van
delivery service, funny t-shirts and hangers, as well as social networking. The company also spent
time connecting with the community by partnering with local businesses and charities. Instead of out-
pricing or out-spending P&G, Hangers embraced its personality and adopted a culture of excellent
service that customers found value in. As a result, Hangers has experienced growth while other local
dry cleaners have reported flat or declining revenues.

MARKET EXPANSION THROUGH PARTNERSHIP

To support new growth, businesses have to expand past their initial customer base, an often daunting
task for small businesses. However, partnering with another successful company can help businesses
reach a new level. Diagnostic Hybrids, specializing in medical diagnostics, did just that, partnering
with Quidel, a market leader in rapid diagnostic tests. This partnership allowed Diagnostic Hybrids to
enjoy a larger market presence, as well as take advantage of better research and development
resources. Although Diagnostic Hybrids was acquired by Quidel, key elements of the organization
remain, with the same company president, and operation as a separate subsidiary.

TESCO'S INTERNATIONAL EXPANSION

Tesco's move into Korea offers a classic case study of building market share internationally. The
company made some smart moves in their Korean expansion, most notably partnering with Samsung,
the leading Korean conglomerate, and embracing the Korean way of life by operating stores as local
businesses and community centers. Tesco also made a smart move by employing nearly 100%
Koreans on staff, with only 4 British employees out of 23,000. Reports indicate that Tesco's intelligent
strategy has won over shoppers in Seoul, with 25% of Koreans signed up for loyalty cards and sales in
the billions, finding success in "crack[ing] the Asian tiger," where competitors such as Carrefour and
Wal-Mart have failed.

TRIUMPH IN NICHE EXPORTS

Another excellent international case study comes from bike manufacturer Triumph, which lost steam
in its British home base three decades ago, but found new life by heading overseas. In 2010, Triumph
sold just 7,562 bikes in the UK, but 50,000 worldwide, indicating that an international interest paid off
for the company. Triumph's famous factory in Warwickshire closed up shop in 1983, but the Indian
factory remained, and these days, the motorcycles have become the country's Harley Davidson. The
company struggles to meet demand in India, with a six month waiting list and a new factory being
built. India's middle class has embraced the vehicle as an affordable commodity, even giving them as
dowries in weddings.

BACKGROUND CHECKS FOR JOB CANDIDATES

Background checks are an issue faced by many companies, as sensitive information is now more
public than ever. OfficeDrop is no exception, as the company scans paper into digital files, including
patient records and minister sermons, most of which require trustworthy employees who can handle
documents discreetly. Many companies offer quick, superficial checks, but for OfficeDrop owner Prasad
Thammineni, more information was required. He found a company that would allow research to delve
into a number of different sources and perform a more comprehensive search. Other business owners
offered somewhat critical opinions of Thammineni's choice, pointing out that instead of Googling to
find a background check company, he should have asked his business network who they were using.
They also recommended that he take advantage of free resources, including online searches and
checking out social media sites to learn more about job candidates.

EMPLOYEE ENGAGEMENT IN TOUGH TIMES

When Gamal Aziz stepped in as president of the MGM Grand Hotel & Casino, he didn't just take on a
$400 million spruce up of the hotel, he worked on the employees as well. He asked rank and file
employees to share their insight through a hotel, discovering that there was a disconnect between
what was going on at the hotel and the knowledge of staff. He implemented an easy fix, creating short
meetings at the start of every shift to inform employees of daily happenings so that staff could offer
more to guests, improving customer loyalty, return visits, and spending. Experts laud Aziz for
differentiating the MGM grand with top quality service from the employees.

SOCIAL MEDIA SERVES UP CREME BRULEE

Marketing is key, whether you're a multibillion dollar company, or just a guy with a cart full of creme
brulee. But just doing it isn't enough: you have to market effectively. Curtis Kimball, the man behind
the Creme Brulee Cart, put Twitter to work for him amassing thousands of followers and growing his
business by allowing people to follow the cart through the online service. Kimball engages with
customers and develops a personal relationship with followers online, asking for suggestions on flavors
and cart locations. Perhaps the most impressive part of this story is the fact that Kimball has no
marketing budget (Twitter is a free service), yet enjoys an incredibly popular status and high ratings
on Yelp.

OVERREACHING PRODUCTS, SUFFERING SALES

You can't be everything to everyone, as Hickory Farms found out. A company that started out with
holiday gift baskets including sausage, ham, and cheese at one point had an offering of 2,500 different
products, sprawling the company and resulting in a loss of favor with customers. Recognizing this
issue, Hickory Farms streamlined itself, slashing their number of products from 2,500 to 300 with
more modern visuals, descriptions, and other features, including less packaging and more recycled
content. The company also overhauled their website, making it easier to shop online. All of this
streamlining resulted in a price reduction of 13% that Hickory Farms was able to pass on to their
customers. Brand strategist Jennifer Woodbery believes that this was a smart move, making the most
of Hickory Farms' trusted name and image with an effective rebranding of offerings.

MAINTAINING CONSISTENTLY GOOD EMPLOYEES

It happens all the time: good employees get a promotion, and suddenly, they're not so good anymore.
Such is the case for cat shelter Paws Need Families, as Della, a cleaner turned assistant manager,
then manager started arriving late, letting applications sit, and slipped on inoculations, all serious
offenses. Instead of confronting Della directly, general meetings were held, and an assistant manager
was hired to compensate for Della's shortcomings. Ultimately, Della never cleaned up her act, and was
fired. Ken Blanchard, co-author of The One Minute Manager believes this situation could have been
avoided with frequent meetings and support with a system of review, both of which can identify issues
before they become real problems.

RECALL CRISIS MANAGEMENT

In 2009, Maclaren issued a recall for every stroller it had sold in the US for a decade, which came to 1
million units. The strollers were recalled so that a cover could be installed to prevent amputation of a
baby's fingers, which could happen if the baby were to be in the stroller in the wrong spot. As a luxury
brand, this incident was damaging even though it was a misuse of the product and not a defect.
Experts believe that Maclaren did the right thing in the aftermath of the recall, asking for a fast track
recall from the Consumer Product Safety Commission, and got out in front of the recall as it started
spreading through the press, saving face and further embracing a mission of child safety.

DEALING WITH LATE PAYING CLIENTS

We all hope that clients will pay on time, but the fact is that most businesses have to deal with
lateness at some point or another. How you deal with it can make all the difference, and this case
study reveals a smart strategy. When a client wrote to check in on the progress of work, a web
developer replied that she was hesitant to work quickly for that client because she was still waiting on
payments for month-old work. This immediately got the attention of the clients, who contacted her
and discovered that their checks were not going to the right address. The problem was solved almost
instantaneously, enforcing both leverage and rewarding positive behavior. However, it was risky, and
the client criticized her for not sharing a warning before coming to a difficult point.

SUPPLY CHAIN DISRUPTION

In 2000, a fire at the Philips microchip plant affected phone manufacturers Nokia And Ericsson. The
companies reacted in different ways, and ultimately, Ericsson did not do well, quitting the mobile
phone business and allowing Nokia to win over the European market. While Ericsson had tied up all of
its key components in a single source and planned to wait out the problem with the fire, Nokia worked
to snatch up spare chips from other plants and suppliers, as well as re-engineered some of their
phones to adapt to different chips from new suppliers. It's not hard to imagine what happened after
that. Nokia kept trucking along, while Ericsson suffered from months of lost production and sales,
allowing the market to be dominated by Nokia. This incident and fallout is a classic lesson in supply
chain risk management.